Historic Preservation Tax Credit - Small Projects

About this archived opportunity

Description The Historic Preservation Tax Credit program offers tax credits to developers who sensitively rehabilitate historic buildings to offer them new life. Iowa offers this tax credit program to ensure character-defining features and spaces of buildings are retained to help create distinct and vibrant communities. Approved projects may receive a state income tax credit of up to 25% of the project’s qualified rehabilitation expenses (QREs). QREs are defined as expenses allowed under Section 47 of the federal Internal Revenue Code (https://www.nps.gov/tps/tax-incentives/taxdocs/IRC-Section47.pdf) QREs do not include project expenditures financed by federal, state or local grants or forgivable loans, unless allowed under Section 47. Credits may be carried forward for 5 years, or until depleted. Tax credits are transferable and refundable. Eligibility Only an eligible taxpayer may apply for tax credits under this program. An eligible taxpayer is defined as the fee simple owner of the property or someone having a long-term lease, which meets the requirements of the federal historic rehabilitation credit. Units of government (cities, counties) are not eligible to apply for credits. Project buildings must be historically significant for the project to qualify for tax credits. Buildings must meet at least one of the following criteria: Building is listed on the National Register of Historic Places or determined by the staff at the State Historic Preservation Office to be eligible for listing Building is contributing to the significance of a historic district that is listed on or eligible to be listed on the National Register of Historic Places Building is designated as a local landmark by city or county ordinance Barn constructed before 1937 OR a barn that is listed on or eligible for listing on the National Register of Historic Places Projects must include substantial rehabilitation. Substantial rehabilitation is defined as: Commercial buildings: QREs must equal at least 50% value of the building (excluding land) before rehabilitation or $50,000, whichever is less Non-commercial buildings: QREs must equal at least 25% of the assessed value of the building (excluding land) before rehabilitation or $25,000, whichever is less The process for applying for Historic Preservation Tax Credits is a 3-part application process. Applicants MUST have approved Part 1 AND Part 2 applications approved by the State Historic Preservation Office prior to applying for tax credits through Iowagrants.gov. Application Instructions & Documentation Applications submitted for projects with estimated QRE’s at or below $750k are considered “Small Projects”. These projects may have Part 2B applications submitted year-round but are limited to a maximum of $187,500 in credits. Applicants must submit all required information and attachments. IEDA will only review complete applications. Financing documentation required The budget in the application automatically calculates “financial readiness” based on the status of all project funding sources listed. Applicants will list each funding source, the amount of the funding source, and the status of the funding source; The financial readiness amount is calculated based on this information. Financial readiness is calculated as follows: Term Sheet: 25% of the amount of financing listed -A term sheet is a document identifying interest in providing financing with general conditions outlined Commitment Letter: 50% of the amount o